An Equilibrium Analysis of Distribution Channel with Consideration of Advertising Competition

A distribution system including a manufacturer and two independent retailers, who use advertisement to compete for end customers, was studied in this paper. The retailer´s commodity demand volume is influenced by competitor´s advertising input as well as by his own. Then in the new situation, how are the retailers´s advertising input policy? How do manufacturers make the replenishing policy to different retailers? Which factors influence and how to influence the choice of marketing channel? These questions are the main research contents of this paper